With A-level results just out, we asked two graduates, Melanie and Natasha, to talk about how they managed their finances throughout university and what advice they would give to any students in the process of choosing student accounts now…

When I joined university three years ago I opted for the student account offered by the Co-operative. Whilst it wasn’t the most advertised account out there, I chose it after reviewing many others thoroughly and decided it was the best choice for me and my money needs.

I didn’t fall for the bank account freebies

Many of my friends were taken in by more popular banks and their freebies, for example, NatWest offers a 5 year 16-25 Railcard, which retails at about £150. However, I saw my friends lose far more than £150 when they often exceeded their overdraft, both on agreed and non-agreed terms. When you’re out partying the last thing you think about is whether or not you have an agreed overdraft or not; in fact your debit card is often the source of “magic money”

I worked during the mornings before university

What’s more, I decided to get a part-time job, nothing too strenuous,. What I earned from my job I used as “pocket money” and therefore most of my student loan stayed intact. I used resources like budget calculators and followed money management advice, mainly on grocery shopping because that’s where the most money can be easily lost. Oh, and I tried my best to lay off the post-night out kebabs!

I’d only withdraw my budgeted amount

Saving money, budgeting and being frugal didn’t cut into my social life either; I still went out and had fun but I always stayed aware of how much I was spending. Often I would give myself a budget for the night (or the week) and if I was going over it I would stop drinking or buying myself that extra Starbucks on the way to university! I’d only withdraw my budgeted amount for the day/night and leave that debit card tucked away; safe and sound.

The end result?

When I left university I only had a small amount of my overdraft to pay off and I soon transferred onto a graduate scheme from another bank. I definitely realise that banks aren’t as friendly as they seem and that I shouldn’t be scared to question their motives. Whilst I didn’t get any freebies from the account I chose, the general good service and the overdraft limits and interest rates have put me in a better position than any financial benefits could have got me. My top tip is to shop around and be honest with yourself. Look for a bank account that suits your spending habits, not simply for free phone insurance or a free railcard; for example if you know that you’re not the best budgeter than look for a bank account that will help the most.

The tale of a student bank account blunder

By Natasha (recent graduate)

I’m Natasha and, as a student, I was always looking for a freebie or a bargain… most of the time not looking at the small print. Two for £5 might look great but if the small print is one for £2.50, I’m really not getting the point of bargain hunting! Unlike Melanie, I learnt the hard way when it came to student accounts.

Taken in by freebies, I didn’t read the fine print

The fine print, had I read it, would have told me about; the overdraft limits, the overdraft fees and the interest rates. Whilst I was always aware of having an overdraft and that it wasn’t “free money”, I definitely took it for granted. What didn’t occur to me were the charges I could (and did) incur when I exceeded my agreed overdraft limit. Combine this with a severe lack of budgeting and money management skills and I seriously struggled during my first two years of university. I wasn’t made as aware as I should have been that the fees I encounter when exceeding my overdraft without informing the bank first would be so astronomical.

I am struggling to pay off my overdraft (plus all the extra fees I acquired)

The added problem is that the interest rates will now sky-rocket. With some accounts you can encounter fees up to £30 per transaction, and that’s excluding interest rates. It’s definitely worth checking out the fine print with student accounts, that way, even if you’re a terrible budgeter, you are prepared for the more disastrous outcomes.

Choosing a student account can have a far greater effect that you realise

My student life might have not been the most frugal but now, as a graduate, I know better. As student tuition fees sky-rocket and the price of living soars, being frugal and knowledgeable about all matters concerning money is ever more important. A small decision like choosing a student account can have a far greater effect than we realise so it’s important to get it right first time.

Melanie and Natasha both write for Student Money Saver, an advice based student finance website created by students for students.

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